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How bad have things gotten for President Obama?

So bad that even the slavish State Run Media are beginning to point out the obvious fibs and flaws in  Obama’s September 8th speech to Congress.

The Associated Press notes here at least four instances of fibbing by Obama in the speech.  The lede paragraph alone is something that we would not have seen even 10 months ago:

WASHINGTON (AP) — President Barack Obama’s promise Thursday that everything in his jobs plan will be paid for rests on highly iffy propositions.

It will only be paid for if a committee he can’t control does his bidding, if Congress puts that into law and if leaders in the future – the ones who will feel the fiscal pinch of his proposals – don’t roll it back.

The AP article points out that Obama’s claim that his new calls for stimulus spending will be fully paid for is unlikely at best given the reliance on a future Congress and president to come up with the money and/or cuts.   Obama’s assertion that his proposals have all been supported by Republicans at one time or another is also a distortion that does not take into account the changed circumstances of the economy and the federal deficits, nor Republican opposition to these very proposals.   The AP correctly notes that Obama’s claim that the new stimulus measures “will not add to the deficit” is patently untrue: since federal revenues are completely absorbed by defense and entitlement spending, any additional spending on stimulus can only come from borrowed (i.e. deficit) funds.  Finally, the AP calls out Obama on his claim that the new stimulus will create immediate employment as several of the proposals, such as the “infrastructure bank,” will take months if not years to set up.

In addition, as we saw with Stimulus I, even Obama admitted that there were no “shovel ready jobs” as he expected.  Repairs of roads, bridges, highway projects all take time to plan and implement and, given the contraction in the construction industry over the last, few years, it is quite possible that any infrastructure jobs that are ready to implement now will be given to the few, remaining companies that have managed to stay alive.   And we can never discount the crony factor when huge amounts of federal dollars are being doled out.   Much of that money will wind up in the pockets of political supporters rather than creating any new jobs.

But the Associated Press is not alone.

The New York Times and CNBC are pointing out the inherent weakness in Obama’s plan to jump start the economy.   CNBC reprints an article from the NYT printed September 10, 2011 titled, “Employers Say Jobs Plan Won’t Lead to Hiring Spur.”

The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan — while welcomed — will change their minds any time soon.

That sentiment was echoed across numerous industries by executives in companies big and small on Friday, underscoring the challenge for the Obama administration as it tries to encourage hiring and perk up the moribund economy.

The plan failed to generate any optimism on Wall Street as the Standard & Poor’s 500-stock index and the Dow Jones industrial average each fell about 2.7 percent.

As President Obama faced an uphill battle in Congress to win support even for portions of the plan, many employers dismissed the notion that any particular tax break or incentive would be persuasive. Instead, they said they tended to hire more workers or expand when the economy improved.

This is such a fundamental concept of business that it amazes me that a president of the United States could not grasp it.  As a small business owner myself, I can attest to the fact that no amount of payroll tax breaks or tax credits would induce me to hire an employee that I do not need.  In a business that is functioning normally — i.e., not skewed by cronyism, subsidies or other factors that distort profit-loss considerations– hiring is driven by demand for products or services that cannot be met with current staffing.  A tax break or credit, particularly one that is temporary, is not a reason to hire.

So this is the tectonic divide between the Obamas of the world and The Rest of Us.   In Obama’s unshakeable faith in the Keynesian Religion, the only answer, always and forever, is stimulus.   He simply cannot see that the biggest obstacle to hiring is the very government action to which he is irrevocably committed. For The Rest of Us, a government that is imposing a huge, yet-to-be understood healthcare mandate, spending us and the next 3 generations into debt oblivion, corrupting the natural order of free markets in competition for customers and innovation, and going out of its way to demonize the “rich,” punish them and redistribute wealth to the unproductive class of society is ample reason to hunker down, save up your cash (or convert to hard assets), hire no one you will have to be regulated for, and wait out the storm of insanity that is Washington, D.C. right now.

Allow me to suggest two actions the government could take that could produce dramatic effects on the economy:  repealing Obamacare (or at least waiving its effects for all 50 states as suggested by Romney), and lifting most of the federal restrictions and bans on domestic energy production.   On this second point, the economic impact of oil and gas production (to say nothing of coal and nuclear) is astounding: both Texas and North Dakota (North Dakota!) have seen huge increases in employment due to a booming oil and gas industry exploiting both old wells and new ones with the process of hydraulic fracturing.

And to show that this boom is not limited to what we think of as the typical oil and gas states like Texas, there is this article from The Dayton Daily News that sketches the outlines of just how vast the natural gas reserves in Ohio might be:

DAYTON — Ohio appears on the cusp of a 21st-century oil and gas boom that could net tens of thousands of new jobs and perhaps build a foundation for new industry, proponents say. The source is natural gas-rich shale rock beneath three-quarters of the state.

***

The Utica Shale, which geologists say has yet to be fully analyzed, extends westward across three-quarters of the state from Ohio’s eastern border, state estimates show. It also lies under New York, New Jersey, Pennsylvania, Maryland, West Virginia, Virginia, Kentucky, and Tennessee.

It could extend to Montgomery County, but drilling potential remains unknown. Chesapeake said it will increase drilling rigs in the Utica to 20 by the end of 2012 and 40 by 2014.

This year, the state opened up parks and other public land to drilling over opposition from environmentalists.

It might seem a stretch that Ohio could profit from a boom based on oil and gas, an industry with roots here that date to the 19th century. But a new boom appears possible if Pennsylvania’s recent experience with new drilling in another formation, the Marcellus Shale, is any guide. The Marcellus has a smaller footprint in Ohio than the Utica and lies beneath Ohio’s easternmost counties.

Pennsylvania is weathering an iffy economy well, with an unemployment rate of 7.8 percent. Its share of the Marcellus is helping. The Pennsylvania Department of Labor & Industry issued its estimate this month that natural-gas and crude oil extraction and related industries created 72,000 new hires from the fourth quarter of 2009 to the first quarter of 2011.

It’s too tricky to attribute all the hires to new drilling, said Tim McElhinny, an analyst with the department. But there are so many new hires that a portion must be due to the Marcellus. Those jobs include well drilling, engineering, trucking, highway and bridge building, testing, metal fabrication and new government hires.

The jump in employment in the core gas industries — extraction, drilling and pipeline work — is smaller but nevertheless doubled to 18,837 from the fourth quarter of 2007 to the fourth quarter of 2010.

For the immediate future, it looks like the eastern third of Ohio and the Marcellus Shale is where the action will occur. But longer term, besides offering job opportunities to out-of-work or underemployed residents, low-cost natural gas from the Utica could fuel industrial redevelopment in Ohio, propoponents say.

The U.S. Geological Survey in August updated its estimates for the Marcellus Shale region underlying New York, Pennsylvania and Ohio, saying it contains 84 trillion cubic feet of undiscovered, recoverable natural gas, vastly more than thought nearly a decade ago in large part because of new drilling and extraction technology. The last government assessment in 2002 suggested about 2 trillion cubic feet of recoverable gas.

The Utica Shale, some experts believe, could be bigger still. Tom Stewart, executive vice president for the Ohio Oil and Gas Association, said more drilling and analysis is needed to fully comprehend the Utica.

Consider for a moment the vast increase of estimated gas reserves cited above:  from 2 trillion in 2002 to 84 trillion as of August 2011.  This is only covering the Marcellus Shale formation.  The Utica Shale formation “could be bigger still.”

And lest anyone think that the impact of these dramatic discoveries is limited to the energy industry, the article notes:

Also promising have been expressions of interest by the chemical industry about locating close to a rich supply of low-cost, natural gas. New Ohio natural gas could be a key feedstock of chemical production, Stewart said. That could prove a rich spin-off from the finds, he said.

Natural gas has been touted by some as a potential transitional energy source to renewables because it’s a cleaner fuel than coal and has reduced impact on climate change.

Ignore the bit about “climate change” which is bunk.  Nonetheless, few people in the U.S. today realize that our economic salvation is at hand.  I hope to post an article in the near future on the amazing energy wealth that has been discovered in the U.S., but for now it is enough to say that the advances in technology hold out the very real potential to revolutionize our economy with cheap and abundant oil and natural gas.   Beyond the huge number of new jobs in the industry itself nationwide, estimated by some at 1 million in the next seven years, imagine the many ripple effects.   Even the very announcement of a new policy to fully tap into our energy resources is enough to significantly affect the global price of oil and bring down U.S. energy costs, effectively pumping billions of dollars into the economy.   As the price of oil goes down, the money flowing to fascist states like Iran is severely restricted.   Want to bring down the tyrants in Tehran?  Bring the price of oil down to even $60 per barrel and the Mullahs’ economy crashes and burns.

Of course, this kind of commitment to energy independence is not going to happen under this Administration.  Nor is any, other sensible plan going to emerge that would free up private enterprise and restore the shaky nerves of consumers.   So, barring a dramatic change at the White House, it is time to batten down the hatches and ride out the storm.   We will all have to wait until November 7, 2012, the day after the national elections.   Assuming that the American people come to their senses and reject Obama for a second term, I am officially putting on my Nostradamus hat and predicting, here and now, that the economy will begin a dramatic comeback from that point onward.

If this post in Reuters is to be believed, roughly 46% of Americans are not paying attention to the debt ceiling war raging in D.C.   Given, however, that TCJ readers tend to be well informed and attentive to what is happening in the country and the world at large, I would guess that many of you have been paying attention.   I will confess here and now that I have been following it almost obsessively and things are reaching a fever pitch as the proverbial clock counts down to the fictional “zero hour” of August 2nd, the date where, supposedly, the federal government will run out of money.

Given that fever pitch, it is only right that I should throw some gas on the fire and go on record with some analysis and predictions.

Something profound happened in November 2010.   Whether you are a Democrat, Republican, Independent or something else, a veritable, electoral tsunami swept the country in November with voters throwing out politicians who had been complicit with the Obama spending spree of 2009 and 2010.    One message, extremely clear and simple, rang out:  stop!  Stop the spending and the borrowing that fuels the spending.   Republicans campaigned across the country on the message of reining in spending and tackling the exploding federal debt.   And they got elected largely on that basis.  There should be no reason, therefore, that politicians and pundits in Washington, D.C. voice such shock and disbelief that the Republican-controlled House, for seemingly the first time in history, is seriously concerned about spending and, in particular, enabling another mountain of spending by raising the debt ceiling.

Consider, too, that what we are seeing in the debt ceiling battle is the direct result and culmination of the battle over the 2011 Budget (or lack thereof).  Recall that the prior Congress had not passed any sort of budget (as required by law) in 2011 but had, instead been functioning according to “continuing resolutions” that avoided a government shutdown.   When Republicans took the House in January 2011, they let it be known that the continuing resolutions had to end.  Unfortunately for all of us, the deal brokered by Rep. John Boehner that allowed a 2011 Budget to pass did little or nothing to cut actual, 2011 spending and it was clear to everyone that the real opportunity to effect spending reforms and budget reductions would occur when the debt ceiling was reached.   As James Pethokoukis observed in July, the crisis is not a government “default” but just another, looming shutdown based on a lack of funds to keep all parts of government operating.   The chart attached to his article convincingly lays out the revenues coming in to the federal government versus the outlays that come due in August 2011:

That is the context in which we find ourselves.

As I study the news and opinion articles, I have been impressed with a few politicians who seem to get it.   One of them, elected in the 2010 Wave, is Senator Marco Rubio from Florida.   Here is the link to a July 30th speech he gave in the Senate that is stellar (Warning– it is a 14-minute clip, but is well worth the time):

Sen Rubio re debt ceiling on YouTube

Rubio gets it.

He understands that the issue confronting Congress is so much bigger than a so-called “government default.”   Rubio gives a very good, initial summary of the actual problem:  the Federal government takes in roughly $180 Billion each month but spends roughly $300 Billion each month, forcing the U.S. to borrow something like 40 cents of every dollar it spends.    This is not difficult to understand for anyone who has had to manage their own finances, let alone run a business.   The attitude in the Capitol that such an imbalance between income and expenditures is in any way tolerable (and there are many in D.C. who think the U.S. is not spending enough) tells us everything we need to know about the sick culture of our national leadership.

But Rubio goes beyond just the summary of the problem writ large.   He precisely points out the deliberate inaction of the Senate and White House in refusing to propose any plan of any kind that would address the collision with the $14.2 Trillion debt ceiling, a collision that has been clearly anticipated since at least January 2011.   Rubio, in fact, accuses the Senate majority and the White House of manufacturing the “debt crisis”  by sheer political calculation that the American people will hold Republicans responsible if the debt ceiling is not raised.   This “crisis,” in other words, is only a crisis because Obama and Reid wanted a crisis.

Contrast Rubio’s remarks with the question posed by Senator John Kerry at about the 7:40 mark in the video.   Kerry was apparently miffed that Rubio would dare to quote then Senators Obama and Biden in 2006 and Sen. Harry Reid in 2007, all of whom spoke against and voted against raising the debt ceiling then.   Kerry sought to distinguish those embarrassing votes in 2006 and 2007 by pointing out that their votes did not really matter because the debt ceiling increase was being approved by large margins at the time.

Does everyone catch the implication here?  Kerry is giving away the game.  In essence, Kerry is saying that you cannot take anything said by Obama, Biden or Reid seriously in 2006 and 2007 because, afterall, everyone knew that the debt ceiling was going to be raised so there was no harm done by them voting against it or railing against it.   All that talk in 2006 and 2007 was so much puffery, no one took it seriously.   Now, it’s serious.   So anyone who speaks out against raising the debt ceiling must really mean it and that means, ipso facto, that such a person is a “terrorist” or a “suicide bomber.”   Kerry even went so far as to call those, prior votes and speeches “truly symbolic.”

At the end, Rubio makes the most important point of all, that the real crisis facing the U.S. is its apparent inability to reduce spending to a point that the bond rating agencies consider sustainable.   This is the real threat to Americans, not the manufactured crisis of hitting the predetermined debt ceiling.   The debt ceiling could be raised $2.4 Trillion dollars tomorrow (as the President has demanded) but that does not solve anything.   Until there is a plan in place that fundamentally alters the spending trajectory of the U.S., the rating agencies have made it clear that the U.S. is on the brink of losing its AAA rating which will inevitably lead to higher interest on the Federal debt and have a ripple effect throughout the U.S. economy as states and lenders are forced to pay more for borrowing.  Rubio likens the situation to a house on fire and the calls by Senator Kerry and others to compromise make no sense when the compromises do nothing to extinguish the flames burning down the house.

Now comes the thoroughly disheartening news via Hot Air.   Apparently the professional politicians are on the verge of letting the American House burn down.

According to Ed Morrisey, citing an ABC News report:

ABC reports this morning that Congressional leaders have already begun briefing their caucuses on the eleventh-hour deal that emerged from the White House last night.  Jonathan Karl notes that the deal is contingent on getting enough support from each House caucus to form a majority, and in the Senate to avoid a filibuster.  We’ll come back to that in a moment, but Karl also updates the story on the deal.  The topline numbers are apparently $2.4 trillion in matching spending cuts and debt-ceiling raises instead of $2.8 trillion, but now both are split into two parts:

The current framework would give the president the authority to raise the debt ceiling in two parts: roughly half of it now and the balance at the end of the year.

Each increase would be subject to a Congressional resolution of disapproval.

If Congress voted to disapprove that increase, however, the President could veto their disapproval.

The AP reported earlier on the $2.4 trillion number, too, although they say the cuts will be “slightly more” than the debt-ceiling boost.  That’s still enough to get Barack Obama past the 2012 election, but not by much. It guarantees that the debt ceiling will be a 2012 election issue, although by now that was a given anyway.

However, the added McConnell wrinkle is interesting — and potentially a big win for Republicans.  Essentially, Republicans get to claim credit for the cuts while laying blame for the debt increases on Obama.  If they “disapprove,” Obama will veto the disapproval and end up owning all of the political baggage for the debt-ceiling increases.  That’s a steep price to pay for Obama just to protect himself through the next election, although he could turn it on its ear and refuse to veto the second increase disapproval and force this fight all over again.  That would, however, put the country back in “crisis” mode, and that would still be all on Obama.

Despite the triumphant tone of Morrisey’s post, the reality is that Obama gets to borrow at least $2.4 TRILLION more dollars (although it remains to be seen whether there will be enough investors willing to toss another gigantic load of money into the U.S. black hole without higher interest rates or whether the Treasury will be forced, yet again, to buy up some portion of the offered bonds itself) while the so-called “cuts” seem to be the same, phony 10-year reductions in spending that will never materialize.

Morrisey provides more details on the pending deal here:

2.8 trillion in deficit reduction with $1 trillion locked in through discretionary spending caps over 10 years and the remainder determined by a so-called super committee.

The Super Committee must report precise deficit-reduction proposals by Thanksgiving.

The Super Committee would have to propose $1.8 trillion spending cuts to achieve that amount of deficit reduction over 10 years.

If the Super Committee fails, Congress must send a balanced-budget amendment to the states for ratification. If that doesn’t happen, across-the-board spending cuts would go into effect and could touch Medicare and defense spending.

No net new tax revenue would be part of the special committee’s deliberations.

Note too that the second round of cuts appears to be guaranteed; if the Super Commission can’t agree on specific and precise reductions, then an across-the-board cut goes into place.

I expect plenty of hyperventilating at the term “Super Committee,” but it’s basically the kind of ad hoc committee that Congress can authorize at any time.  It sounds a lot like the BRAC process used by Congress to identify military bases for closure.  The prohibition on net tax revenue gains is a big, big win for Republicans if it holds.  I should note that Jimmie Bise in his post believes that the second round of cuts might be actual cuts; if so, then this is an even bigger win.

Again, the celebrating is way too premature.  Once again, legislation is being considered without any public debate or open discussion.  It is all being hashed out in private, back-room deals and then presented, at the last minute, under a pressure cooker of phony, Media-inspired hysteria, for a take-it-or-leave-it vote— yeah, the kind of vote where you are burned at the stake as a heretic if you vote “no.”   Will anyone have read this deal by the time for voting, or will this be another Obamacare monstrosity that has to be passed, as Pelosi put it, “to know what is in it.”  We all know how these surprises turn out.

But wait, Ed Morrisey says that there may be a requirement in the deal that if the spending cuts recommended by the Super-Duper Committee are not adopted by the end of December 2011, then the House and Senate have to at least vote on a balanced budget amendment (or perhaps actually pass a balanced budget amendment to send to the States to approve) or automatic cuts will be made to Defense spending and Medicaid (among other things).   The details are slim, but the cuts to Defense have been rumored to be draconian and far worse than the cuts to Medicaid which would only affect care providers and not the beneficiaries.   How’s that for a deal?   Republicans get to choose which poison they most prefer.  Hooray!

There is no way that the Democrat-controlled Senate is going to approve a balanced-budget amendment to the Constitution.   Why should they?  The only penalty is the terrible, awful “cuts” to Medicaid that come out of the hide of the evil doctors, insurance companies and drug companies.   I can hear the Democrats whining to the gullible Republicans in Bre’r Rabbit fashion, “Oh please, please don’t throw me in that briar patch!”

Just to show that I can do more than complain about the bad deals the GOP is considering, I will offer at least a partial, near-term solution here.

If the Republicans cannot bear to stick to the three, different bills they have passed (the 2012 Budget, the Cut, Cap and  Balance Bill and the last version passed in the House, dubbed “Boehner 3.0”), at the very least, the Republicans should pass a short-term (read here 60-day) increase in the debt ceiling that will get the government through the rest of the 2011 Fiscal year that ends on September 30th.    Use that additional time to keep hammering away for real, immediate, tangible, meaningful cuts to the 2012 Budget.  If the Senate and White House will not agree to substantial and immediate cuts in the 2012 Budget, the House should start passing individual appropriation bills, starting with the most politically volatile items first:  Defense, Social Security, Medicare/Medicaid and, perhaps, unemployment benefits.   At the same time, the House can pass small, incremental debt ceiling increases that will require some level of immediate cuts to government spending— enough, in other words to pay the debt service and, say, 90% of the government expenses for the next 60 days, but not 100%.   It will be up to the Senate and Obama to ignore or vote these bills down, but at least the House will have taken concrete steps to provide spending reductions.  The House can continue to pass these bills with actual spending reductions that will reduce the need for future debt ceiling increases.   It will also short-circuit the inevitable “crisis” of a government shutdown when the Democrats refuse to pass a 2012 Budget in the Senate and then demand another continuing resolution.

This, by the way, is in stark contrast to the approach taken by Obama, Reid and Boehner that calls for spending reductions over 10 years.   Forget these 10 year plans! This is not the Soviet Union.  Even the Politburo was not delusional enough to think that they could come up with ten year plans.  Five years of fantasy at a time was enough for them.

To conclude this nice, little rant, it is just pathetic to consider that the GOP is on the verge of caving in, yet again, to panic legislation.   If this happens, it is time for fiscally conservative Americans to seriously consider ditching the Republican party in favor of a third party.  Or, rather, a second party since the GOP is, for all legislative purposes, no different than the Democrats.

By now, almost everyone is aware of the controversial acquittal of Casey Anthony in Orlando, Florida.

Unlike many people (and despite being a lawyer by trade), I did not follow this case and I have been only casually following its results.

But there are two, critical points that need to be made and understood here.

First, in our system of criminal justice, the State must prove its case.  This is such a fundamental concept for the American system that it is almost embarrassing to mention.   Nonetheless, it seems that many people in the media and protesters outside of the courthouse have forgotten that all-important concept.   But this idea that the State must prove the guilt of the accused, and prove it beyond a “reasonable doubt” to a jury of peers is the key stone that protects us from arbitrary oppression by the State.  The Founding Fathers considered this an essential bulwark of liberty.   So when the jurors in the Casey Anthony case explain that they could not convict Ms. Anthony because the State had not proven the allegations, that is an extremely serious charge and one that indicates that the system is working.

The fact that the public perceives that “justice” was not carried out illustrates: (A) that the public is never shy about condemning people without all the facts that were available to the jury, and; (B) that the public has lost sight of this key responsibility of the State to prove its case.   As Americans, we must accept that there will be cases where, for whatever reason, the State cannot meet its burden to prove guilt and a criminal may escape punishment for a crime committed.   That is the serious price of liberty, however, and until someone devises a better method to protect us from the oppressive force of the State, we run a grave risk when we undercut that protection by demanding the condemnation of persons that the State could not prove were guilty.

Which brings me to my second point, as illustrated by this article in The Daily Mail.

A juror in the Casey Anthony trial has told how she received death threats and has been unable to work since she was cleared of murder.

The woman, known only as juror number 12 left her job and went into hiding fearing co-workers would ‘want her head on a platter’.

Her husband said before leaving she told him: ‘I’d rather go to jail than sit on a jury like this again.’

And this:

One, Jennifer Ford, 32, said there was not evidence to convict the 25-year-old mother.

She said: ‘I did not say she was innocent, I just said there was not enough evidence.

‘If you cannot prove what the crime was, you cannot determine what the punishment should be.’

The nursing student told ABC news: ”Everyone wonders why we didn’t speak to the media right away.

‘It was because we were sick to our stomach to get that verdict.

Another, Russell Huekler said the jury only saw evidence that Anthony was a good mother.

He said: ‘‘The first number of witnesses were Casey’s friend and every time that they said they saw Casey with Caylee, it was a loving relationship and no one provided evidence to the contrary.’

When we reach the point that jurors cannot serve without fearing for their lives if they dare to hold the State accountable for proving guilt, the jury system collapses.  At that point, jurors compelled to serve will become little better than rubber-stamps for the State, voting to convict out of fear of mob violence and the complete disruption of their lives.   And when the State can count on guilty verdicts, no matter how sloppy or non-existent the evidence, the door is wide open to tyranny.   And, lest anyone think that tyranny cannot happen in these United States, just look at the Fast and Furious/Gunwalker scandal for a sample of government run amok.

According to this article in The Washington Examiner, the prospects for the 2012 Federal Budget are bleak.

There are just 10 weeks remaining until an Aug. 2 debt ceiling deadline set by Treasury Secretary Tim Geithner. It’s a seemingly generous amount of time but too short in the eyes of some lawmakers, who are wrestling with how deeply to cut the budget and whether to increase the debt ceiling, the amount of money the government is allowed to borrow.

Scores of Republicans have pledged to vote against raising the nation’s debt ceiling if spending is not cut drastically, imperiling the measure in Congress and possibly forcing the government to default on its loans for the first time.

Despite months of debate, only one proposal has been advanced to address spending cuts, and that plan — written by House Budget Committee Chairman Paul Ryan, R-Wis. — may come to the Senate floor for a vote this week.

Ryan’s proposal would reduce spending by $6 trillion over 10 years and reform Medicare and Medicaid. But it isn’t expected to muster the 60 votes needed to pass, mostly because senators, including Republicans, are fearful of tackling popular entitlement programs with the 2012 elections looming.

The Federal Government is deadlocked, plain and simple.

According to every conventional way of approaching entitlement spending, it is an impossible conundrum.  Conservatives have many ideas about reforming or replacing such programs, but Republicans refuse to embrace them for fear of being tarred as heartless killers of old ladies and the poor.   Liberals know in their hearts that these programs cannot, under any realistic scenario, continue as they are, but no Democrat is willing to even consider mild reforms such as the one posed by Rep. Paul Ryan for fear of being hacked to death by the Left as a sell-out or traitor to the People.   So Republicans dither and delay while Democrats (and their media allies) demagogue the issue and distort the facts.

In fact, entitlement spending demonstrates, perhaps better than any other issue, the inherent weakness and fatal attraction in a central government that has badly strayed from its original, limited role.   There is simply no way for the Federal government to make the required changes to Social Security, Medicare and Medicaid that will keep the Federal Government from falling off the financial cliff with Democrats in control of the Senate and White House and Republicans in control of the House.   And it is not an option to wait until the 2012 elections possibly give control of all three branches to the Republicans.    America’s fiscal problems will not stay put until then (and Republicans may not be trustworthy on spending reforms considering the last time they held all three branches).

With this impasse in view and the very real prospect that the Democrat-controlled Senate will go yet another year without passing a fiscal budget, I offer this suggestion as a way for Democrats and Republicans alike to escape their chains:  turn entitlement spending over the States.

This is the perfect situation for punting the football and it makes absolute and total sense.   It is the right thing to do.   The ball is deep in our own territory, it is fourth and 50 yards to go and the coaches cannot make up their minds on any suitable play to call.   “Punting” to the States is the only answer.

“Punting” in this context means that the Federal government recognizes it is simply not in a good position to administer programs such as Social Security, Medicaid and Medicare and, worse, is completely incapable of controlling them.    The Federal government is far too big, too prone to waste and inefficiency and, most importantly, was never intended by the Founders to occupy the role of National Philanthropist.    “Punting” means, too, that the States are far better equipped in many ways to decide what level of care and support to accord to their citizens and implement the corresponding programs.

So, for example, if California wants to endow all of its seniors with generous retirement and health benefits, let them do so as long as the burden for funding those lavish benefits falls squarely on the shoulders of Californians alone.

Consider entitlement spending in terms of a business:  each State has to decide what benefits it can and cannot afford to dole out.  If the State is too generous, it will eventually go “out of business” as millions move in to enjoy the generosity while millions more move out as their taxes inevitably skyrocket.   If a State is too stingy, it will cease being an attractive place to work and live.  Between the extremes is an enormous range of policy options and solutions that can be crafted to fit the unique circumstances inherent in every State.  And, since most States are forced to balance their budgets each year by law, the State government will undertake entitlement spending with sobriety.

How could it work?

Such a change could not be done overnight, but it need not be terribly complex either. The first step would be along the lines of what Rep. Paul Ryan suggests in his proposal for Medicaid reform:  block grants to the States.   Florida, for example, might get a much larger grant based on 2010 Census numbers of its elderly population (and specifically its indigent population) than a demographically younger state.  According to the 2000 Census, Utah is the “youngest” state, i.e., the one with the smallest percentage of elderly persons, while Florida is the oldest.

The block grants should also factor in existing poverty levels and not just the percentage of elderly in a given State.  West Virginia has one of the higher percentages of elderly people but it also has one of the poorest populations.  Other factors could be considered as well, such as populations of disabled or other, at-risk populations.

With this grant money, each state can use it as they see fit to provide for their at-risk populations.

This kind of block granting has the unique advantage of incentivizing better care for these at-risk populations.  Say, for example, that Maryland develops a better, more efficient way of educating handicapped children.  (This happens to be true).  As this fact is known, more parents with handicapped children will move to Maryland which, in turn, will warrant more grant aid to Maryland to coincide with the higher, handicapped population.  Resources get allocated to those locations that do the best job of serving their populations at the local level.   Conversely, if another State does a terrible job with its care for handicapped children, then those parents will have every incentive to move to Maryland rather than remain in sub-optimal care elsewhere.   A key feature would have to be some method for tracking the subject populations in each State to determine the block grant levels.

But can States be trusted with a large, no-strings-attached, grant of money?  To continue the example, what if Maryland chooses to use the billions in Federal aid to plug the notorious gap in its annual budget?  I submit that even a liberal, tax and spend haven like Maryland would never do this precisely because the Governor and state legislature are far more sensitive and accountable to Maryland voters than the U.S. Congressional delegation will ever be.   Consider that, under the 2000 Census, the average Congressional district was comprised of 646,952 persons– far too many persons for individual citizens to hold the politicians accountable.  Politicians are much more easily held accountable to their local constituency simply by virtue of the smaller numbers contained in each, State legislative district.  It will, of course, be up to each State to decide how to best use the grant money and tough decisions will need to be made, but those decisions will be made far better at the state level where it is far more difficult for AARP to mobilize its members and bully politicians.

Giving entitlement spending to the States also makes sense in terms of perspective.    When we look at Social Security spending, for example, at a national level, the sheer size and scope of the spending is completely disorienting.   When speaking of hundreds of billions of dollars, it is nearly impossible to put the choices into concrete terms: who are these “millions of elderly” who will starve or go without medications?  Why can’t we afford another $200 million for this program when we are already spending $800 billion?   But when the debate is put at the state level, and more importantly, MY state level, things become much more focused.   Supposing that Maryland receives $6 billion in grant money to cover social security, medicare and medicaid for Maryland citizens for the next year, how should that money be used?  Am I willing to pay more in state taxes in order to ensure, for example, that 65 year-old Aunt Mary gets a social security check every month even though I know that she has an adequate retirement income from the Maryland Teachers Pension?  Maybe.  Maybe not.  And will Aunt Mary join in marching on the state capitol to get that extra money even if it means higher taxes for me and her neighbors, friends, colleagues?

Some States will give that money to Aunt Mary and raise taxes to do so.  Others may not.  In the end, however, it will be far easier to come to grips with the many issues involved when we are dealing with specific populations in our own state and with the direct ramifications of those decisions in our own state.

Consider, too, the enormous savings to the Federal budget when the huge bureaucracies associated with Social Security, Medicare and Medicaid are allowed to shrivel up and die.  The people employed at these federal agencies are not, necessarily, joining a bread line, however.   With the block granting of funds to each State it is likely that persons with pension and healthcare experience will be in demand (hopefully by private firms that provide services rather than bloated State bureaucracies, but that is another topic).  In any event, a reduction in federal personnel should be welcome relief to taxpayers everywhere.

Finally, the greatest benefit of transferring entitlements to the States is the effect upon Federal power and interference in the lives of ordinary citizens.   When the Federal government holds the power of health care in its hands, it induces an unhealthy obeisance to the central power.   This power needs to be split up among the 50 states so that ordinary citizens are empowered to hold their State officials accountable and rein in abuses.    This principle can, of course, be applied across a wide spectrum of federal activities.

Hopefully the politicians in Washington, D.C. will pass the buck in this instance which would, ironically, be the right thing for once.

The reaction to President Obama’s April 13 speech at George Washington University has been, predictably, partisan and all over the map.

Democrats have hailed it as “real leadership” and Republicans have denounced it as harsh and misleading.

After reading the text of the speech, I have an altogether different reaction.  I wonder if any of you share it.

Obama’s speech leaves me with a profound sense of loss.

It is a sense of deep disbelief, that we, as a nation, could have drifted so far from our original moorings that we are reduced to this kind of speech.   That feeling is deepened by the events of  early April where the Republican majority in the House of Representatives, faced with a 2011 Budget they inherited from a reckless Democrat-controlled Congress that is on course to spend more than $1.7 trillion beyond revenues, did not have the nerve to push for more than a pittance in spending reductions.

Even the budget proposal put forward by Rep. Paul Ryan (R- OH) is no, real encouragement.  It takes such small steps over such a long period of time and does nothing to address the looming budget killer– Social Security– that it requires an impossible leap of faith to believe that intervening elections will not derail even this modest attempt at fiscal sanity.

Now we are being told that the national debt limit must— MUST!– be raised again just one year after it was raised to $14.294 trillion.

A friend recently pointed me to an opinion piece by David Brooks in The New York Times that is notable only for its inane quality.  I include it here as just a sample of how utterly clueless the State-run Media seem to be about current events.

Brooks’ main point is that, while everything may look much the same in today’s political landscape as it has since the 1980’s, his clairvoyance is telling him that some sort of change is coming:

If you dive deeper into the polling, you see the country is not mobilized by this sense of crisis but immobilized by it. Raising taxes on the rich is popular, but nearly every other measure that might be taken to address the fiscal crisis is deeply unpopular. Sixty-three percent of Americans oppose raising the debt ceiling; similar majorities oppose measures to make that sort of thing unnecessary.

There is a negativity bias in the country, especially among political independents and people earning between $30,000 and $75,000 (who have become extremely gloomy). It is hard to rally majorities behind immigration, energy or tax reform.

At some point something is going to happen to topple the political platform — maybe a debt crisis, maybe when China passes the United States as the world’s largest economy, perhaps as early as 2016. At that point, we could see changes that are unimaginable today.

New political forces will emerge from the outside or the inside. A semi-crackpot outsider like Donald Trump could storm the gates and achieve astonishing political stature. Alternatively, insiders like the Simpson-Bowles commission or the Senate’s bipartisan “Gang of Six” could assert authority and recreate a strong centrist political establishment, such as the nation enjoyed in the 1950s.

Neither seems likely now. But in these circumstances, rule out nothing.

Maybe it is just the cozy, isolated, elitist cocoon that Brooks inhabits, but it is fairly clear that the “new political forces” that Brooks is searching for have been on exhibition since 2009: the Tea Party movement.   How did Brooks miss the entire 2010 elections?  The enormous change in the House and even the Senate could not have slipped Brooks’ notice, could it?

And what about the Union Mobs in Madison, Wisconsin, trying to intimidate duly elected officials from carrying out their duties (with the direct and coordinated aid of Democrat “flee-bagger” lawmakers who hid out in Illinois)?

I am in my mid-forties, so my direct recollection of U.S. history prior to the early 1970’s is rather limited, but does anyone remember a time when the Federal government was so hamstrung and a President so disconnected from reality?

Where does this lead us?  The U.S. is on a collision course with the proverbial, economic iceberg and what passes for leadership at the moment is debating whether our final meal should be in the dining room or out on the ship deck.

Does anyone else get the feeling that we may have elected possibly the least qualified, least competent and worst ideologue to the Presidency at a time in history when we can least afford this kind of mistake?

When I read this string of articles, that is exactly the feeling I get.   We may be witnessing a tsunami of policy errors that will be no less devastating to the U.S. than those that hit Japan recently.

Here is a disturbing article in The Daily Telegraph that sets the stage:

The “star wars” arms race was began in January 2007 when China shocked the White House by shooting down one of its weather satellite 530 miles above the Earth.

The strike, which resulted in thousands of pieces of debris orbiting the earth, raised fears that the Chinese had the power to cause chaos by destroying US military and civilian satellites.

In February 2008, America launched its own “test” strike to destroy a malfunctioning American satellite, which demonstrated to the Chinese it also had the capability to strike in space.

America stated at the time that the strike was not a military test but a necessary mission to remove a faulty spy satellite.

The leaked documents appear to show its true intentions.

One month before the strike, the US criticised Beijing for launching its own “anti-satellite test”, noting: “The United States has not conducted an anti-satellite test since 1985.” In a formal diplomatic protest, officials working for Condoleezza Rice, the then secretary of state, told Beijing: “A Chinese attack on a satellite using a weapon launched by a ballistic missile threatens to destroy space systems that the United States and other nations use for commerce and national security. Destroying satellites endangers people.”

****

A month after the Chinese strike, America shot down one of its own satellites, ostensibly to stop it returning to earth with a toxic fuel tank which would pose a health hazard. The Chinese did not believe the explanation.

In secret dispatches, US officials indicated that the strike was, in fact, military in nature.

This was the state of affairs as the Bush Administration wound down and the Obama Administration took over.  When the Chinese launched another ASAT test, the Obama Administration reacted:

The most recent cable in the collection was sent from the office of Mrs Clinton in January 2010.

It claimed that US intelligence detected that China had launched a fresh anti-satellite missile test. Crucially, Washington wanted to keep secret its knowledge that the missile test was linked to China’s previous space strikes.

The cable, marked “secret” said the Chinese army had sent an SC-19 missile that successfully destroyed a CSS-X-11 missile about 150 miles above the Earth.

“This test is assessed to have furthered both Chinese ASAT [anti-satellite] and ballistic missile defense technologies,” stated the memo to the US embassy in Beijing.

Mrs Clinton’s cable stressed that “the Obama administration” retained the Bush-era concerns over Chinese space weapon plans.

So far so good.  Until we come to this article by  Eli Lake in the Washington Times that points out that the U.S. is on the verge of agreeing to a European Union protocol on space activities that could hamper our ability to develop space capabilities while leaving the Chinese free rein:

The administration has signaled that it is preparing to accept the European Union’s draft Code of Conduct for Outer Space Activities with minimal changes to the document. An administration interagency review concluded last month that the code of conduct — aimed at reducing the amount of space debris that could collide into satellites — would not damage U.S. national interests in space or limit research and development into classified programs.

The United States and France are expected Tuesday to sign a bilateral agreement to share data on space debris.

Peter Marquez, who served as National Security Council director of space policy for President George W. Bush and for President Obama until Sept. 29, raised concerns about the U.S. strategy. He said it could lead other states to set limits on U.S. defenses in space.

“Implementation of the space strategy is going to be key. International norms could unintentionally limit U.S. deployment and development of satellites that track orbital debris and other satellites in space,” he said.

“It leaves open the door also for the United States to be forced to disclose the nature of its intelligence collection activities and capabilities from orbit.”

Rick Fisher, a senior fellow at the International Assessment and Strategy Center, said the strategy fails because it does not adequately account for the Chinese threat to U.S. satellites. “One gets the impression from this document that the Obama administration simply wants to ignore the Chinese threat in hopes it will just go away,” he said. “There is apparently no consideration of developing U.S. active defenses for space that would more effectively deter China.”

This President is doing major damage to virtually every aspect of the United States.  Here we find that he is possibly eroding our future defenses against attacks on our vital communications and information systems to the Chinese.  At this rate, 2013 may be too late.

Professor N. Gregory Mankiw (Harvard) has a piece in The New York Times‘ business section that is intended to impress upon us all the frightful prospects that await the U.S. in the future if immediate action is not taken on the federal debt now.  (Hat Tip to PowerLine)

As a disclaimer I must say that I do consider immediate action to rein in federal spending a critical piece of saving America’s future and the consequences for not doing so truly are fearful, but reading Professor Mankiw’s list of horrors brings to mind commonsense policies rather than doomsday.

Mankiw writes the column from the perspective of a U.S. president in the year 2026.   The article is the text of the president’s speech to the nation.  So let’s have a little fun and put ourselves in the audience for this 2026 presidential address.

Here is the calamitous news that the president is forced to give to the nation:

Yesterday, I returned from a meeting at the International Monetary Fund in its new headquarters in Beijing. I am pleased to report some good news. I have managed to secure from the I.M.F. a temporary line of credit to help us through this crisis.

(I like this bit about the HQ being moved to Beijing.  It fits the Times’ recurrent fantasy that China is the paragon of economic and political progress, notwithstanding that China has more and deeper challenges to its future than America ever will).

This loan comes with some conditions. As your president, I have to be frank: I don’t like them, and neither will you. But, under the circumstances, accepting these conditions is our only choice.

OK, here it comes.  The terrible, awfable, excruciating cuts…. wait for it….

We have to cut Social Security immediately, especially for higher-income beneficiaries. Social Security will still keep the elderly out of poverty, but just barely. [Emphasis added].

Nooooooooo!  High-income beneficiaries may see a “cut” in their social security benefits???  How will they live without that unneeded income?  How will they cope with the thought of having paid into what they knew was a rotten system with negative returns on their investment that had no, real prospect of ever paying them back what was paid in?  The system that they chose to keep in place all those years by voting for Democrats that continually denied that there was even a problem with the system and obstructed and demagogued every attempt to reform it???  I hope it doesn’t get worse than this.

We have to limit Medicare and Medicaid. These programs will still provide basic health care, but they will no longer cover many expensive treatments. Individuals will have to pay for these treatments on their own or, sadly, do without.

Arghhhhhhh!  The pain!  “Limit” Medicare and Medicaid??? They will only provide “basic health care” and “no longer cover many expensive treatments” ???  Cruel world!  We will be expected to actually pay for something ourselves or do without?  This sounds agonizingly like personal responsibility!  I can’t expect my family and friends to help with something like my health care when it is clearly the responsibility of the federal government to provide me with every treatment and drug into eternity!  What about healthcare being my right?

We have to cut health insurance subsidies to middle-income families. Health insurance will be less a right of citizenship and more a personal responsibility.

Curses!!! There’s that word, “personal responsibility” !  No subsidies for the middle class?  What’s next?  Are they going to stop handing out free bread and eliminate the circuses at the Coliseum??

We have to eliminate inessential government functions, like subsidies for farming, ethanol production, public broadcasting, energy conservation and trade promotion.

The world is truly ending!  Eliminate farming subsidies?  Doesn’t the gubbmint know that farmers can’t survive on the record-high prices being paid for corn, soybean and other crops?  Don’t they know that the world food shortage means that farmers need those subsidies more than ever??   And ethanol…we can’t live without that!  Even if it does reduce the world food supply and costs far more in energy to produce than the energy released, it is so…GREEN and earth-friendly and makes us feel good that we’re doing the responsible thing rather than sending that corn to the starving people in Africa.   And no more public broadcasting?  Who will give me my liberal-biased news (besides ABC, NBC, CBS, MSNBC, CNN, the AP, Reuters, AFP, The Washington Post, The New York Times, The LA Times…).   No more money for energy conservation?  Really?  How will Americans know how to conserve energy on their own without someone to tell them how?  Those bills I get from the utility company are so complicated.

We will raise taxes on all but the poorest Americans. We will do this primarily by broadening the tax base, eliminating deductions for mortgage interest and state and local taxes. Employer-provided health insurance will hereafter be taxable compensation.

Horrors!  It’s simply outrageous to think that more than 50% of U.S. citizens should pay anything in taxes.  This almost sounds like the nutty ideas of the “Far Right” all those years ago who wanted to restructure the tax code so that everyone enjoyed a lower, simpler flat tax without needing a high-paid CPA to do their taxes.  And those employer-sponsored health plans have been so vital to keeping down costs, too!  Taxing these might actually force Americans to switch to a model for health care that would make sense and be affordable– the villainy!!

We will increase the gasoline tax by $2 a gallon. This will not only increase revenue, but will also address various social ills, from global climate change to local traffic congestion.

Thank God!  Finally this president is talking sense.  It is way past time to crank up the gasoline tax another $2 per gallon.  I’ve always thought those tiny, little Smart cars were so cute.  Now everyone will have to drive them.   And I hear they have an optional drive train installed— pedals.  So cute!   And with that extra $2 per gallon, the federal government will know just how to spend that money curing the “various social ills.”   Yes, like “global climate change.”   Even though it is the year 2026 and none of the things the global warming scientists predicted have happened — massive crop failures, all the coastal cities flooded out and the polar bears drowned– we just know that one day global climate change is going to kill us all, so why not $3 or $4 per gallon tax?

AS I have said, these changes are repellant to me. When you elected me, I promised to preserve the social safety net. I assured you that the budget deficit could be fixed by eliminating waste, fraud and abuse, and by increasing taxes on only the richest Americans. But now we have little choice in the matter.

Wow!  I just had an incredible feeling of de ja vu listening to you, Mr. President.  Here it is 2026 but I am almost sure that I heard some, other presidential candidate promise that all our problems could be fixed simply by eliminating waste, fraud and abuse and by re-distributing the wealth of those greedy, evil, rich people– let’s not even call them “Americans”;  real Americans don’t get rich unless they are the right kind of rich people who live in L.A. and donate small portions of their money to causes like saving the California Crested Booby-Hatch or promoting the rights of pedophiles.

It’s OK, Mr. President, I see now that you had no idea that being president of a big country like the U.S. would be so hard and I understand that you don’t have any choice but to make these terrible, awfable cuts.

But maybe, if you have the time, could you look into closing Guantanamo?

Folks, this post by White House blogger Keith Koffler sums up perfectly the abdication of office by this President:

The Middle East is afire with rebellion, Japan is imploding from an earthquake, and the battle of the budget is on in the United States, but none of this seems to be deterring President Obama from a heavy schedule of childish distractions.

The newly installed tandem of White House Chief of Staff William Daley and Senior Adviser David Plouffe were supposed to impart a new sense of discipline and purpose to the White House. Instead, they are permitting him to showcase himself as a poorly focused leader who has his priorities backward.

This morning, as Japan’s nuclear crisis enters a potentially catastrophic phase, we are told that Obama is videotaping his NCAA tournament picks and that we’ll be able to tune into ESPN Wednesday to find out who he likes.

Saturday, he made his 61st outing to the golf course as president, and got back to the White House with just enough time for a quick shower before heading out to party with Washington’s elite journalists at the annual Gridiron Dinner.

With various urgencies swirling about him, Saturday’s weekly videotaped presidential address focusing on “Women’s History Month” seemed bizarrely out of touch.

Obama Friday took time out to honor the 2009-10 Stanley Cup Champion Chicago Blackhawks. Thursday was a White House conference on bullying – not a bad idea perhaps, but not quite Leader of the Free World stuff either.

Obama appeared a little sleepy as he weighed in against the bullies, perhaps because he’d spent the night before partying with lawmakers as they took in a Chicago Bulls vs. Charlotte Bobcats game.

Meanwhile, the president has been studying for weeks whether to establish a No Fly Zone over Libya, delaying action while the point becomes increasingly moot as Qaddafi begins to defeat and slaughter his opponents. And lawmakers from both Parties are wondering why he seems to be AWOL in the deficit reduction debate.

The Libya indecision follows an inconsistent response to the protests that ousted former Egyptian President Mubarak and seemed to catch the White House off guard. The perfunctory response from the White House Monday to Saudi Arabia’s dispatch of troops to Bahrain suggested the administration wasn’t prepared for that one either.

But the fun stuff won’t end anytime soon. On Thursday, the Taoiseach of Ireland will be in town to help the president celebrate St. Patrick’s Day. And then Friday it’s off to Brazil for the start of a three-country Latin American tour.

When Obama took the oath of office, he swore:

“I, Barack Hussein Obama, do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and I will to the best of my ability, preserve, protect, and defend the Constitution of the United States.”

If Obama refuses to faithfully execute his duties in such a brazen manner, perhaps it is time that he find other employment, or we, the people, can find it for him.  As things stand, I am not sure that we can wait until January, 2013.

It appears that the showdown between Hamid Karzai and ISAF may finally be here.

An article in today’s Washington Examiner leads with this:

Afghan President Hamid Karzai’s call to ban private security contractors and dismantle the NATO teams helping to rebuild the country is a high-stakes ploy that will make efforts to aid the Afghan people and contain the Taliban insurgency even more difficult, experts said. Karzai made the announcement in Germany over the weekend, saying it was part of his plan to speed up the process of withdrawal by foreign countries in the coming year. The reconstruction teams operate outside the Karzai government’s control in helping to build schools and provide basic services in remote parts of the country. The level of corruption inside the Afghan government is so high that many officials — both Western and Afghan — say the jobs can’t be done under Afghan government control.

U.S. officials in Afghanistan have not criticized Karzai’s statement, downplaying any suggestion it represented a rift between NATO and the Afghan government. U.S. Army Lt. Col. John Dorrian, spokesman for the International Security Assistance Forces, said “ISAF and President Karzai share the same goal of building capacity within the Afghan government to provide security and government services to the Afghan people. We will continue to support his efforts to eliminate the need for private security firms and provincial reconstruction teams, because they provide services that ultimately the Afghan government must provide.”

For Karzai, a public flirtation with the Taliban, while hastening divorce proceedings with the West, makes good internal politics.

“Karzai realizes that time for him is running out with the 2014 deadline looming,” one U.S. official said. “Karzai is beating his chest to show that he is not in the pocket of the U.S. Unfortunately, he has filled his pockets with the money of the Afghan people.”

The point has been made many times and in many places, but here we have a fresh example of why it is so self-defeating to announce dates of withdrawal.  Not only does it motivate the enemy by feeding the belief that they can outlast us, but it creates a political vacuum as the withdrawal date looms.

Whatever one may think of Karzai as a leader or ally against the Islamofascists, he has at least gotten this much right: if he is going to continue as head of the Afghan government (and keep his head, literally), he needs to build his own power base and legitimacy that does not depend upon American support.  In the long run, that is a good and necessary development.   In the short term, when the Afghan government and military are too weak to resist Islamist attacks, such thinking works directly counter to our efforts and makes victory that much harder to secure.

A military official, who works closely with reconstruction teams in the nation’s dangerous southern provinces, said that Karzai’s grandstanding on issues like taking control of reconstruction teams “is hurting the mission.” The official said that corruption in the local and national government has hampered efforts to bring needed supplies and services to the Afghan people.

“This shouldn’t be about politics and trying to play nice with Karzai,” the U.S. military official said. “The Afghan people don’t trust Karzai, so they don’t trust us because we support him. Our soldiers and Marines have given everything. What for, if we’re not going to finish what we started and do what we need to do to get the job done.”

It is worth pointing out, as well, that for all of the back-tracking and recent talk about staying committed to Afghan security, the Obumble Administration has not done a very good job convincing Karzai that the U.S. can be relied upon for support after 2014.

Time for a showdown

This is an intolerable situation for the U.S.  It is time for a showdown of sorts with Karzai.

Karzai and his cronies have been shrewd enough to realize that most NGO’s and private firms cannot function in Afghanistan without security.   By shutting down the private security firms, Karzai has made himself the only game in town.  These aid agencies are literally at Karzai’s mercy and can easily be intimidated and bent to his will.

The U.S. and ISAF are the only, other rivals in the game.  It stands to reason that any activities undertaken by these forces are effectively outside of Karzai’s control and, by extension, corruption.  Karzai is embarking on a campaign to terminate or re-route every aid project not under his control.

Rather than allow that to continue, however, the U.S. and ISAF must keep the PRT’s and any, other effective aid organizations (such as the one Tim Lynch works for) under their protective cover– or at least away from Karzai’s.

Furthermore, not only should the U.S. continue direct funding to the PRT’s (to the extent that they are effective) and maintain their autonomy, the U.S. should re-direct, over some period of time, a greater share of funding directly to local, U.S. military commanders.

Battalion and company commanders in Iraq proved extremely adept at using their so-called “emergency funds” to leverage their positions in their area of operations.  Commanders in Afghanistan can be trusted with the money to a far greater degree than the Karzai government, and these commanders, at the ground level, will know how best to use it.

The only question is how far Karzai is willing to go to challenge this sort of thing.

Right now the U.S. military and the ISAF are the only things that work even half-effectively in Afghanistan.  We can maximize this asset if we by-pass the Karzai government and put the aid directly into the hands of our commanders, giving them the broad discretion to use the money as they see fit, including the ability to hire contractors for aid projects and development and, if appropriate, hiring local security forces as a multiplier.

Will Karzai order the ANA or ANP to confront the U.S. military?  Not likely.  The U.S. and ISAF are providing much of the training of the Afghan security forces; they heavily depend upon U.S. officers and logistics.

The U.S. can and should continue to talk a good game.  Like Lt. Col. Dorrian, the unified message should be that we support the goal of a strong Afghan government and the rule of law.   The unspoken message— the message privately conveyed to Karzai– is that they have yet to demonstrate a readiness to handle aid money and aid projects necessary at this time to win the war.

If the U.S. is not willing to do this, then it is simply a question of time until Karzai has so hamstrung our efforts there that a 2014 withdrawal is no longer an option but an inevitability.

Do not misunderstand: I do not favor staying in Afghanistan on a permanent basis.  But the U.S. cannot afford to leave in abject defeat, either.

Although this information has been out since last year, in view of the $1.5 Trillion Deficit for 2011 projected by the Congressional Budget Office, it is well worth taking another look at this, updated report from The Cato Institute (and the accompanying video), titled, “New CBO Numbers Re-Confirm that Balancing the Budget Is Simple with Modest Fiscal Restraint.”

(Hat tip to Instapundit).

Here is the money quote:

Many of the politicians in Washington, including President Obama during his State of the Union address, piously tell us that there is no way to balance the budget without tax increases. Trying to get rid of red ink without higher taxes, they tell us, would require “savage” and “draconian” budget cuts.

The Congressional Budget Office has just released its 10-year projections for the budget, so I crunched the numbers to determine what it would take to balance the budget without tax hikes. Much to nobody’s surprise, the politicians are not telling the truth…

The chart below shows that revenues are expected to grow (because of factors such as inflation, more population, and economic expansion) by more than 7 percent each year. Balancing the budget is simple so long as politicians increase spending at a slower rate. If they freeze the budget, we almost balance the budget by 2017. If federal spending is capped so it grows 1 percent each year, the budget is balanced in 2019. And if the crowd in Washington can limit spending growth to about 2 percent each year, red ink almost disappears in just 10 years.

When was the last time that our political leaders found the spine to balance the budget?

… I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year.

Mr. Mitchell perhaps gives Bill Clinton and the GOP Congress too much credit.  Recall that the 1990’s involved huge cuts to the Defense budget (which came back to haunt us later).  The savings in Defense outlays was plowed into all sorts of domestic goodies for both Clinton and Congressional constituencies, but the fact remains that the politicians somehow managed to keep overall spending down even in the midst of increasing revenues from a booming economy.

The lesson seems clear:  get the Federal budget in line with revenues and start reducing the overall, Federal debt.   This seems to be experience elsewhere in the world:

We also have international evidence showing that spending restraint – not higher taxes – is the key to balancing the budget. New Zealand got rid of a big budget deficit in the 1990s with a five-year spending freeze. Canada also got rid of red ink that decade with a five-year period where spending grew by an average of only 1 percent per year. And Ireland slashed its deficit in the late 1980s by 10 percentage points of GDP with a four-year spending freeze.

No wonder international bureaucracies such as the International Monetary fund and European Central Bank are producing research showing that spending discipline is the right approach.

As Mr. Mitchell’s article notes, fixing the deficit is not a complicated matter.  It simply requires our elected leaders to say no to the ever-growing wish lists of the Left and the President.

Hopefully the new Congress is up to the task.